LARA Articles

Pursuing Reforms in Land Administration

The Capital Market Development Council (CMDC) supports reforms to address inefficiencies and bottlenecks in the land administration process, thereby contributing to economic development and social justice. These reforms are embodied in a bill pending before Congress—the Land Administration Reform Act or LARA. Some may wonder why capital market players and practitioners would be interested in land administration reforms. The following article explains the reasons behind this position.

The reforms seek to rationalize and streamline the land administration process which is presently handled by multiple agencies and governed by multiple land laws leading to different standards for land valuation, overlapping land titling processes and opportunities for graft and corruption. Inefficiencies arising from outdated land legislations and administrative processes contribute to higher costs in doing business involving real estate properties. Banks and other mortgage-finance institutions, for example, harness these assets for productive use in business enterprises and housing investments. Enhancing confidence in the land administration process via rationalized and clear valuation standards and titling processes will reduce confusion, delays, minimize occurrence of spurious titles and cut red tape. The consolidation of several land administration agencies into a single agency: The Land Administration Authority (LAA) providing one-stop shop service for land titling requirements, will lead to better service available to the public via convenient and uniform processes made available in strategic locations and speedy release of documents. Increased transparency and accountability across the administrative system is a major goal of the integrated Land Administration Authority (LAA).

It is expected that these reforms will bring significant contributions to the financial and capital markets. A streamlined and transparent land titling process will mitigate if not eliminate spurious and fake titles or at the very least, make it easier for banks and other financial institutions to check on the authenticity or legitimacy of titles offered as security to loans. An updated database will help government widen its tax base and thus, collect more real property taxes. In turn, the increased revenues may allow the government to accommodate capital market reforms that on the short run will result in decreased tax revenues.

In this instance, financial sector players would like to see a more systematic and cohesive land administration system in place. Evidently, a major repository of wealth in the Philippines is land. A centralized, comprehensive and accurate database of land holdings will provide greater transparency and predictability in real estate sale and mortgage transactions.

The advocacy to pursue land administration reforms is being carried out through the LAMP or Land Administration and Management Project, an inter-agency project led by the Department of Environment and Natural Resources (DENR) in partnership with the Department of Justice (DOJ)/Land Registration Authority (LRA) and the Department of Finance (DOF).

The reforms will be carried out via three major legislative enactments—the Land Administration Reform Act, Free Patent Amendment and the Land Administration Code. Of particular interest to CMDC member associations are the policies and legislative proposals to pursue property valuation and taxation reforms. There are plans to establish internationally accredited professional association of private and government appraisers. Equitable and uniform property valuation standards and guidelines will be adopted by the profession. Hopefully, best practice valuation standards will be developed and enforced.

The institutional rationalization plan will remove duplication and overlaps in service delivery and improve efficiency, responsiveness, transparency and accountability of services. A key objective is to abolish judicial processes for titling in favor of simple administrative processes, clarifying rights of persons occupying land to obtain a title and recording all rights to all land in the Torrens Title Register.

The reforms are aligned with the poverty alleviation objective of government by improving the security of land tenure and encouraging efficiency in land markets in the rural and urban areas.  

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